The Supporting and Impeding Factors of Java

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The Supporting and Impeding Factors of Java Preanger Coffee Agribusiness on Margamulya of Pangalengan Sub District of Bandung Regency To cite this article: E Djuwendah et al 2018 IOP Conf. Ser.: Earth Environ. Sci. 166 012043

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HSS IOP Conf. Series: Earth and Environmental Science 166 (2018) 1234567890 ‘’“” 012043

IOP Publishing doi:10.1088/1755-1315/166/1/012043

The Supporting and Impeding Factors of Java Preanger Coffee Agribusiness on Margamulya of Pangalengan Sub District of Bandung Regency E Djuwendah1, T Karyani1, E Rasmikayati1, S Fatimah1 and Deliana1 1

Agribusiness Study Program, Faculty of Agriculture, Padjadjaran University (UNPAD) Jl. Raya Bandung – Sumedang KM. 21, Jatinangor 45363, Indonesia E-mail: [email protected] Abstract. Java preanger coffee is internationally recognized as superior arabica coffee from West Java, particularly in coffee trading. The high demand and selling price of coffee has no fully supported the coffee agribusiness because there are other factors influencing it. This research aims to determine the factors supporting and inhibiting the agribusiness of sustainable Java preanger coffee in the Margamulya village the District of Pangalengan. The research design used is qualitative descriptive with case study method. The results showed that in subsystem agro-input, the main supporting factors are coffee plant seedlings and labor, while the main constraint factors are land, fertilizers, weather, and capital. In the agro-processing subsystem, the main supporting factors are the knowledge of farmers in the cultivation of sustainable coffee and selling prices of coffee, while the constraining factors are among others climate changes, and capital. In the agro-industry subsystem, the main supporting factor is processing technology, while the inhibiting factor is capital and processing equipment. On the agriculture marketing subsystem, the supporting factors are market certainty, while the inhibiting factor is capital. On agri-service subsystem, the main supporting factor is the availability of cooperatives, extension agencies, farmer groups, mass media, while the inhibiting factors are less coordinations between supporting institutions with farmers and the absence of financial institutions that provide credit by the characteristics of coffee farming.

1. Introduction Coffee is one of the plantation commodities that has high economic value, as it plays a role in the acquisition of foreign exchange, source of farmers’ income, labour absorption, encourage agribusiness and regional development in Indonesia. Therefore, coffee is included in the seven main plantation commodities of Indonesia, which receives priority development from the government. Java Preanger coffee is one type of coffee Arabicas, especially originated from West Java. According to coffee lovers, Java Preanger coffee has a distinct in the strong floral nuances (floral) with flowery-fruity-nutty-dark chocolate aromas [1]. With the issuance of Government Regulation No. 51 of 2007 on Geographical Indication, based on the suggestions from the Content from this work may be used under the terms of the Creative Commons Attribution 3.0 licence. Any further distribution of this work must maintain attribution to the author(s) and the title of the work, journal citation and DOI. Published under licence by IOP Publishing Ltd 1



community of geographical indication protection (MPIG), Java Preanger coffee and West Java government in 2013 Java Preanger Arabica coffee (JPAC) is certified by the geographical indication from the Indonesian Ministry of Law and Human Rights. Since 2009 JPAC has penetrated international markets such as Southern Korea, Morocco, Taiwan, Hongkong, China, Germany, Japan, England, Netherlands and Germany [2]. The specialty coffee market is currently growing in major consumer countries such as the United States, the European Union, Japan, Southern Korea, Brazil and Indonesia. The countries, which become the main market of coffee demand the quality of coffee to be in accordance with the demands of consumers such as food security, environmental conservation and welfare of farmers. In order to increase the competitiveness of Java Preanger Arabica coffee in regional and international markets, the development of this commodity is done through a sustainable agribusiness approach. Sustainable agribusiness is a functionally integrated ecological agribusiness based on upstream subsystem, farming, yield processing, marketing, and supporting subsystems aligned with the surrounding environment and realizing sustainable agricultural development. Based on the statistic data of West Java from Provincial Plantation Office, the Bandung Regency is a potential coffee development center with an area of 8,656 Ha (31.39%) of coffee plantation area in West Java. Pangalengan Sub district as one of the areas in Bandung with the largest production of coffee. There are 5 villages in Pangalengan Sub district as coffee farming center namely Losari, Margamulya, Wanasari, Sukaluyu and Lamajang. The development of crops and coffee production in Margamulya Village every year tend to increase. Based on interviews with 4 coffee producers in Margahayu village namely Margamulya Coffee Producer Cooperative (CPCM), Malabar mountain, Malabar civet coffee and Coffee Prisca, it was found that the area of coffee farming in Margamulya village in 2013 is 225 Ha, in 2014 is 400 Ha and in 2015 it reached 580 Ha with production respectively of 669 Ton, 1,200 tons and 1740 tons. Nevertheless Potential coffee commodities in Margamulya Village, still faced with some challenges are still found farmers who implement coffee cultivation that does not fit with the technical guidelines of sustainable farming so that the productivity is not optimal i.e 930 kilograms ha-1 or about 62-93% of the standard of national coffee productivity 1300 - 1400 kg ha-1 according to Pusat Penelitian dan Pengembangan Perkebunan. In the stage of agro-industry is still limited the farmers who do the processing of coffee until the stage of horn skin (HS) and 70% of coffee produced by agro-industry in the form of green bean. On the other hand, Java Preanger Arabica coffee from Margamulya village has succeeded in penetrating international market through processing and marketing by CPCM in partnership with PT Taman Delta Indonesia, an exporter, for obtaining UTZ certificate which essentially in the management of its business to pay attention of environment. Therefore it is interesting to study what factors are the driving forces and obstacles in the development of sustainable Java Preanger coffee agribusiness in Margamulya Village. 2. Research Method The research area was determined purposively in Margamulya Village Pangalengan Sub district of Bandung regency because Pangalengan is one of Java Preanger coffee production center in Bandung regency. This research used qualitative method. Qualitative research method emphasizes its analysis on the deductive and inductive processes and on the analysis of the dynamics of relationships between the phenomena [3]. The research technique is case study. The data sources are primary and secondary data. Technical data collection is done by observation, interview and literature study. Interviews are conducted with 34 coffee farmers,

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village officials, the cooperative’s member and management. Data were analyzed descriptively and the technique of data presentation was done by tabulation. 3. Results and Discussion 3.1. Overview of Java Preanger Arabica Coffee Agribusiness in Margamulya Village According to Hanafie [4] agribusiness as an integrated system is defined as all activities ranging from procurement and distribution of production facilities to the marketing of products produced from a farm or agroindustry that are associated with each other. Agribussiness consists of subsystems procurement of production facilities, farming subsystem, agro-industry subsystem, marketing subsystem and sub system supporting facilities. Each subsystems has a backward and forward linkage. Margamulya Village is one of the villages in Pangalengan sub-district that develops sustainable of arabica coffee agribusiness. This is evident through the implementation of UTZ certification by the Margamulya farmers group. UTZ certification certifies the production process traceability which can indicate that the product with this certification has been through a series of good plantation practices, paying attention to social and environmental aspects, food safety and quality improvement. Coffee farming area in Margamulya village ranges from 0.2 to 1.0 H.a.making them known as smallholder coffee plantations. The arabica coffee plantations in Margamulya village are mostly (73.50%) consist of of coffee farming practices on narrow fields (land area < 0.5 ha),14.7% was done on moderate (0.5-1, 0 ha) and 11.80% land area (> 1 Ha). Land tenure is generally owned by state forest company of Indonesia (Perhutani), which managed by farmers through community forest management program. There are 51% of farmers who plant coffee in Perhutani’s land with a profit sharing of 10-20%. There are 40.20% of farmers who plant coffee on their own land and 8.80% plant coffee trees simultaneously on their own land and Perhutani ‘s land. . Currently cultivation of Arabica Java Preanger coffee in Margamulya Village has been increasing because many farmers had switched from planting vegetable commodities to coffee plants both on their own land and Perhutani ‘s land. The transition of practices of these planting commodities is partly due to the motivation of farmers, environmental awareness, the suggestion of Perhutani to grow coffee in forest areas through community forestry program, as they provided assistances for coffee seeds. Furthermore, coffee farming risk is lower than vegetable farming. According to leaders of the Rahayu forest village community institution and the head of the Margamulya farmer group, the concept of forest management with the community provides two benefits: increased economic income and practices on sustainable forest conservation. Varieties of Arabica coffee are grown by farmers in Margamulya Village in the early days of 2001-2003 were brought from Central Aceh coffee seedlings (Ateng) and Kartika I. However, since 2010 farmers started to plant Linne S 795 coffee seeds, and in 2013 planted Sigarar Utang which has the peculiarity to bear fruit following the pattern of local rainfall distribution. Plant densities used are varied from 1 X 1 meter and 1.5 X 1.5 meters. Arabica coffee plants start flowering at the age of 2 years and then it can be harvested from 2.5 to 3 years old and continued until the plants are 20 years. Arabica coffee takes 6- 8 months from flower bud to harvest. Harvesting are done by picking ripe coffee fruit. The harvest season takes place between March and August. Generally produce processing is done by large plant traders and cooperatives. The Cooperative of Coffee Margamulya Producer (CPCM) has applied the standard operating procedure of coffee processing which refers to UTZ certification. Java Preanger coffee processing is done immediately after the farmers implement the harvest of red coffee (cherry) by wet processing method. Wet processing process begins with sorting of cherry coffee, peeling the outer coffee skin with pulper to produce Horned Skin (HS) coffee. Further proccesses are

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12-36 hours fermentation and continues with washing. Drying uses partition or drying floors until moisture content around 12.5%. Deep skin peeling are done by huller machine, followed by drying processes to reach 12% moisture content. Finally, the coffees are sorted by grader machines and then packed using sacks and stored in storage facility. There are some farmers who chose to process cherry coffee into horn skin (HS), because they think HS processing can increase their income. However, farmers who process HS are still very small, or at least 10% of farmers population. this is due to the limited capital that they have. This is in line with research done by Kirana S and Karyani [5] showing the price differences between HS Rp which amounts to Rp 23.000 per kilogram and cherry coffee which is Rp 8,500 per kg. Processing of cherry coffee to HS gives added value to farmers, equal to Rp 528,74 per kilogram of cherry coffee. Large traders which has a processing equipment and The Cooperative of Coffee Margamulya Producer to process coffee into green beans. Cooperative gets the added value of green beans processing ranging from Rp 2,100.68 6,1015.68 kg-1, depending on the destination market. While the add value roasted bean and gounded bean processing are Rp 15,772.95 and 23,462.71 kg -1 respectively. Production capacity of Margamulya coffee is about 350 ton cherry coffee per- harvest season. Production capacity of cooperative producers of margamulya coffee are about 70 tons of green beans. Good quality of green beans (grade 1 and 2) are sold to the exporter company, PT Taman Delta Indonesia, which located in Semarang for further export to Japan by labeling the product as UTZ certified. Low quality of green beans are sold to local market in Medan, Bandung and other cities. The cooperative also processes and markets roasted coffee and ground bean coffee with the Java preanger brand of Gunung Tilu coffee sold at souvenir shops, exhibition and e-commerce such as through blibli.com. Some collectors who process coffee sell the processed products to PT Indocom Citra Persada in Surabaya and PT Sari Makmur Tunggal in Medan. Java preanger coffee produced by Margamulya Village is favored by consumers because it has a distinctive taste. The result of Java arabica preabook from Margamulya Village which was conducted by Indonesian coffee and cocoa research center (Puslitkoka) at Jember in 2012, concluded that their coffee have the characteristic of spicy, floral and flowery flavors, scored 84,08 and in 2014 with score 84,67 [6]. Based on the Indonesian National Standard (SNI) 012907-2008, the coffee beans of Margamulya village are categorized as good quality (grade 1) which means the value of coffee defects is less than 11 [7]. 3.2. Supporting and inhibiting factors of sustainable Java preanger coffee agribusiness Java preanger coffee agribusiness system includes 5 subsystems in which the implementation should be integrated and synergised.The driving factor is something that helped support the omset of Java Preanger Arabica Coffee Agribussiness. The inhibiting factor is a condition that can complicate the development of Java prenger coffee agribusiness. Internal factors are factors that come from within the agribusiness actors or organizations and external factors are factors that come from outside the actors or agribusiness organizations. 3.2.1 Agro-input Subsystem The agro-input subsystem is all the activities of procurement and distribution of inputs of production inputs for the implementation of a farming technology, and the optimum utilization of agricultural resources. Coffee farmers in the village of Margamulya obtain coffee plant seeds easily, either for free from cooperatives or buy from seedlings in the village of Margamulya. Based on the Decree of the Minister of Agriculture No. 65 / Kpts / SR.120 / 2/2014, there are two h.a. coffee nurseries managed by forest village community institutions Rahayu Tani in Margahayu village. The provincial government also provides free coffee seedlings to farmer [2]. Since the year 2013 CPCM also become a coffee seed cultivator of West Java provincial government aid assistance with a target of 20,000 coffee seeds per year.

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Table 1. Supporting and inhibiting factors on agro-input subsystem Factor

Internal

Supporting

Seed, feertilizer, land, labor

Inhibiting

External

Cooperation with Perhutani in the provision of land The scale of land tenure, capital, Traditional technology of quality of human resources Agricultural

Production inputs are available at agricultural stores which are located in the subdistrict, and labors are available from within and outside of farmer’s family. Farm lands are provided by Perhutani through community forest management program, as it became one of the supporting factor for the agro-input subsystem. The inhibiting factors of sustainable coffee farming development are the narrow scales of land management, the low level of farmer education and the traditional cultivation techniques. Most (51%) of coffee farmers had primary school education, 2.9% were out of school, 43.6% went to middle school (junior and senior high school) and 2.5% participated in higher education. Banking institutions that provides credit to coffee farmers are still limited, hence many farmers had to borrow capital to cooperatives or to collecting traders. 3.2.2 Farming Subsystems Sustainable coffee cultivation practices are culturally cultivated and utilize green gardening practices. Among the practices are for farmers not to open steep forest areas and should take care of the garden including the maintenance of tree protection and pruning; farmers should use organic liquid fertilizer and organic compost fertilizer; and use litter as ground cover; and finally using pest control for Coffee Fruit using traps and biological control. Such practice require control of pests and other diseases using vegetable pesticides; and finally, the use and processing of coffee waste into compost. Table 2. Supporting and inhibiting factors on farming subsystem Factor

Internal

External

Supporting

Suitability of agroclimate, high motivation of farmers, SOP and UTZ certified, integration of coffee plants with livestock Cultivation is not in accordance with the technical guidance of sustainable coffee cultivation and limited capital

The provision of certified coffee seeds, market certainty

Inhibiting

The climate change

Sustainable coffee cultivation is in line with the semi organic coffee cultivation required in UTZ Certification. In principle, farmers should do not use non-organic fertilizers except at the time of initial planting. Therefore, the fertilizers and pesticides used are organic. UTZ Certification is a traceability system to ensure cultivation activities to proces and distribute production in environmentally friendly activities and positive impact for socio-economic community. The altitudes of suitable places for Arabica coffee plants range from 1,000 - 2,000 m asl, annual rainfall 1250 - 2,500 mm dry months (rainfall